The SEC has decided to appeal a district court decision denying the SEC’s application to force SIPC to pay Staford investors.  See SEC v. SIPC, D.D.C., No. 1:11-mc-00678-RLW, 8/31/12, and

The SEC believes that these investors should be protected by SIPC insurance.  However, the court’s decision held that the investors did not invest through the broker-dealer, but the bank portion of Standford’s operation.  SIPC does not intend on giving into the SEC’s machinations, claiming the SEC’s theory is unprecedented. 

This is the first time the SEC has ever initiated such a suit.  The result should be very interesting.